The meeting marked the completion of the first round of the Forum’s peer review process, with the release of 17 new reports assessing the level of compliance with the international standard for exchange of information on request (EOIR). Click here to read the details of the reports.

Many jurisdictions which received less than satisfactory ratings announced that they had already taken or were taking steps to address recommendations made in the review process. Marshall Islands agreed to its report but highlighted‎ recent progress made. Panama reminded the group of recent significant action taken, both in terms of amending legislation, reorganising its competent authority and signing the multilateral Convention on Mutual Administrative Assistance in Tax Matters on 27 October 2016. Trinidad and Tobago also informed the members of their intention to address outstanding issues at the earliest.

A special fast-track review procedure was agreed at the meeting to enable Global Forum to recognise, by mid-2017, progress made and to assess changes being made in various jurisdictions.

A second round of peer reviews now underway will include an assessment of the availability of and access by tax authorities to beneficial ownwership information of all legal entities and arrangements.

Global Forum members took stock of the tremendous progress being made in the implementation of the standard for automatic exchange of information (AEOI), with 97% of jurisdictions committed to exchanging information in 2017 ready for these exchanges. They noted progress and some challenges for jurisdictions committed to launching exchanges in 2018, and agreed to implement tighter monitoring of the delivery of key milestones as well as providing support for implementation. Governance arrangements for a Common Transmission System for exchanging data were also agreed.

Against a backdrop of calls for preparation of lists of non-cooperative jurisdictions, a constructive discussion was held to ensure that all converge around the Global Forum’s transparency standards in their respective transparency initiatives.‎

The Global Forum strongly reaffirmed its commitment to help its developing country members to meet the international standards and benefit from improvements in international tax transparency. It encouraged them to move towards implementing the AEOI Standard as soon as practicable.

In the margins of the Global Forum meeting, Saudi Arabia and Uruguay took an important step towards implementing automatic exchange of financial account information in 2018 by signing the Multilateral Competent Authority Agreement‎.

Peru: Peru’s Phase 1 review demonstrates the country’s high level of commitment to the international standard for transparency and exchange of information for tax purposes, with all elements found to be in place. Peru has a solid legal and regulatory framework ensuring that ownership and accounting information ownership is available for all relevant entities. Peru has sufficient access powers and the right balance has been struck between rights and safeguards and accessing information. Nevertheless, Peru should clarify the scope of attorney-client privilege, to ensure that it is in line with the international standard. Peru’s network of information exchange mechanisms extends to 11 jurisdictions, including all relevant partners. Peru should ensure the expeditious ratification of all EOI agreements. Peru’s response to the recommendations in this report, as well as the application of the legal framework to the practices of its competent authority, will be considered in detail in the next review of Peru, which is scheduled for the second half of 2018. For further information on the exchange of information practice of Peru and to read the full report click here.

PHASE 2 REPORTS

Azerbaijan: Phase 2 review rates Azerbaijan as overall largely compliant with the international standard. Azerbaijan’s legal framework generally ensures that ownership, accounting and banking information are available and can be obtained in line with the standard. However, the Phase 1 review of Azerbaijan in 2015 identified a need for improvement in certain aspects of legal and regulatory framework, including availability of ownership information on legacy bearer shares, minor gaps in the requirement for maintaining accounting information, certain obstacles and lack of clarity on access powers of tax authorities. In practice, the regulatory and administrative mechanism of Azerbaijan ensures that all relevant entities and arrangements in Azerbaijan maintain and report ownership and accounting information as required by the standard. The report notes that Azerbaijan has a well-established Exchange of Information system, processes and procedures to manage the exchange of information requests. During the review period, Azerbaijan has provided information to all its treaty partners within the prescribed timelines. Nevertheless, the gaps in the legal framework have not been addressed by Azerbaijan. Therefore, the Phase 2 report retains the Phase 1 review recommendations. Further, the Phase-2 review recommends monitoring effective implementation of newly introduced legal obligations on nominees and on joint stock companies. Azerbaijan welcomed the review and expressed its strong commitment to acting on the recommendations made in the report. For further information on the exchange of information practice of Azerbaijan and to read the full report click here.

Brunei Darussalam: The Phase 2 review rates Brunei Darussalam overall as largely compliant with the international standard. Brunei Darussalam’s legal framework ensures that ownership information, accounting and banking information is available and can be obtained in line with the standard, although some deficiencies have been identified in relation to oversight of obligations to maintain information in practice. It is recommended that Brunei Darussalam ensure that the monitoring and enforcement of ownership and accounting information is strengthened. Brunei Darussalam has taken action to address key recommendations made in its Phase 1 peer review regarding allowing its authorities the power to obtain and provide information in accordance with the standard. However, Brunei Darussalam should ensure that its domestic law provisions regarding confidentiality or secrecy duties, in particular regarding access to information on international trusts, do not prevent effective exchange of information for tax purposes. In practice, Brunei Darussalam had made efforts to bring its EOI agreements into force expeditiously. Brunei Darussalam should continue to respond to all requests to negotiate EOI agreements (regardless of their form) in a timely manner. Finally, Brunei Darussalam has created a dedicated unit and a detailed process to manage exchange of information requests, however this has not been tested in practice. For further information on Brunei Darussalam’s legal and regulatory framework in the field of transparency and exchange of information and its implementation in practice, access the full report here.

Burkina Faso: The Phase 2 review rates Burkina Faso as overall largely compliant with the international standard. The legal and regulatory framework in Burkina Faso ensures that ownership, accounting and bank information is available in line with the standard. The lack of clarity on the practical arrangements to ensure that the new dematerialisation process is effective for all shares - including eventually existing bearer shares - has led to a recommendation for improvement. The report notes that Burkina Faso has all the requisite access powers to obtain information and was able to access the information for the exchange of information (EOI) requests sent during the review period. Burkina Faso has recently put in place a new organisation for processing EOI requests, including a new exchange of information unit. As this new organisation remains untested, its operation should be monitored by the Burkina Faso authorities. For further information on Burkina Faso’s legal and regulatory framework in the field of transparency and exchange of information and its implementation in practice, access the full report here.

Dominica: The Phase 2 review of Dominica resulted in a rating of Partially Compliant with the international standard. Although Dominica’s legal framework ensures the availability of ownership and identity information with respect to most domestic and foreign entities and arrangements, Dominica is lacking in supervision and enforcement of such obligations. The report also identified significant deficiencies with respect to the availability of accounting information. Dominica is thus recommended to ensure that all entities and arrangements are required to retain accounting records, including underlying documentation, for at least five years and are subject to adequate oversight. The Phase 2 report further noted potential issues with the protection of confidential information exchanged under Dominica’s agreements. Dominica is recommended to ensure that EOI staff are sufficiently aware of exchange procedures and all legal provisions in place to protect sensitive information. For further information on Dominica’s legal and regulatory framework in the field of transparency and exchange of information and its implementation in practice, access the full report here.

Dominican Republic: The Phase 2 review rates the Dominican Republic as overall Partially Compliant with the international standard. Whilst there are legal obligations for most entities to maintain ownership information, the report notes that compliance with ownership obligations was not sufficiently monitored by the authorities over the review period. There are also insufficient mechanisms in place to ensure that ownership information will be available in respect of bearer shares in all cases. Due to certain ambiguities with the procedure for accessing banking information, there were delays in accessing banking information over the review period in some cases and as exchange of information is still relatively new in the Dominican Republic there were certain organisational issues in practice. Nevertheless, it is noted that the Dominican Republic has taken steps to comply with the standard and in June 2016, it joined the multilateral Convention on mutual Administrative Assistance in Tax Matters expending its treaty network to over 100 treaty partners. For further information on the exchange of information practice of the Dominican Republic and to read the full report, click here.

Lesotho: The Phase 2 review rates Lesotho as overall Largely Compliant with the international standard. Lesotho’s legal and regulatory framework overall requires availability, access and exchange of all tax relevant information in accordance with the international standard. Nevertheless, information of all holders of share warrants and accounting records for trusts, mainly those that are not carrying business or subject to tax in Lesotho, might not always be available in Lesotho. In addition, the Phase 2 report identifies room for improvement concerning the enforcement of the legal obligations to ensure the availability of ownership and identity information, accounting records and underlying documentation and banking information for all account holders. Since exchange of information remains relatively new in Lesotho, Lesotho should continue to monitor the practical implementation of the organisational processes of its exchange of information unit. For further information on the exchange of information practice of Lesotho and to read the full report, click here.

Marshall Islands: The Phase 2 review rates the Marshall Islands as overall non-compliant with the international standard. The Phase 2 review shows that the Marshall Islands experienced difficulties in obtaining and exchanging information for tax purposes during the three-year review period from 1 July 2012 – 30 June 2015. Although the Marshall Islands’ legal framework requires that ownership information, accounting and banking information is available for most relevant entities, there is a lack of effective monitoring and enforcement programmes in place to ensure that all relevant entities, in particular non-resident domestic entities, maintain and provide ownership and accounting information. In addition, bearer shares may be issued by non-resident domestic corporations in the Marshall Islands and there are no mechanisms in place to identify owners of such shares. The Phase 2 report also identifies deficiencies in the use of the Marshall Islands’ powers to obtain and collect information. This resulted in the Marshall Islands Competent Authority not always obtaining and exchanging all information requested by its treaty partners. It was also recommended that since the Marshall Islands put in place a new process for responding to EOI requests after the review period, the Marshall Islands should monitor the practical implementation of the organisational processes of its exchange of information unit. The Marshall Islands has indicated that it is moving quickly to address the recommendations made and that it will soon sign the multilateral Convention on Mutual Administrative Assistance in Tax Matters, greatly extending its exchange of information network. For further information on the Marshall Islands’ exchange of information practices and to read the full report click here.

Morocco: Morocco’s legal and regulatory framework overall requires availability, access and exchange of all tax relevant information and is rated largely compliant with the international standard. Nevertheless, room for improvement was identified in areas concerning availability of information on bearer shares’ holder and regarding retention period for accounting records. Morocco is also recommended to accelerate its ratification process and to improve its exchange of information processes. Morocco’s response to the recommendations, as well as the application of its legal framework and exchange of information in practice will be considered in the next round of peer review of Morocco which is scheduled to commence in the second half of 2020. For further information on the exchange of information practice of Morocco and to read the full report, click here.

Panama: The Phase 2 review rates Panama as overall non-compliant with the international standard. The Phase 2 review shows that Panama experienced serious difficulties in obtaining and exchanging information for tax purposes during the three-year review period from 1 July 2012 – 30 June 2015. The Report identifies a variety of reasons for this, including issues related to a disproportionate number of “deemed inactive” companies in Panama, the absence of requirements for entities operating outside Panama to keep accounting records, as well as deficiencies in the use of Panama’s powers to obtain and collect information. This resulted in the Panamanian Competent Authority not always obtaining and exchanging all information requested by its treaty partners. Since the review was completed, Panama has taken a number of important steps to address the recommendations made, including amending its domestic legislation to enhance the strike-off of “deemed inactive” companies, introduce requirements to keep accounting information for all relevant entities and enhance its access powers and enforcement provisions. A reorganisation of the Panama’s Competent Authority office, processes and procedures has also taken place since the end of the review period, with substantial new resources now allocated. In addition, Panama signed the multilateral Convention on Mutual Administrative Assistance in Tax Matters on 27 October 2016, greatly extending its exchange of information network. For further information on Panama’s exchange of information practices and to read the full report, click here.

Romania: The Phase 2 review rates Romania as overall largely compliant with the international standard. Romania’s legal and regulatory framework generally ensures that ownership, accounting and banking information is available in accordance with the standard. However, deficiencies were identified in respect of availability of information on bearer shares, availability of information on foreign companies with sufficient nexus with Romania and lack of enforcement measures regarding shareholder register’s maintenance requirements for certain companies. Romania has in place appropriate organisational processes to ensure provision of responses generally in a satisfactory manner as was demonstrated over the last three years. For further information on the exchange of information practice of Romania and to read the full report, click here.

COMBINED PHASE 1 + PHASE 2 REPORT

Bulgaria: The Combined review assessed Bulgaria’s legal framework as well as its implementation in practice. The report concludes that Bulgaria is overall Largely Compliant with the international standard on transparency and exchange of information. Nevertheless, the need for improvement was identified in respect of availability of ownership information on companies which can issue bearer shares and a certain gap remains in respect of foreign companies and partnerships conducting business in Bulgaria and foreign trusts. The relevant laws and regulations are properly implemented in practice. However, supervisory and enforcement measures taken by the registration authority should be further strengthened. Bulgaria has in place processes and resources to ensure timely provision of the requested information in the majority of cases and it is considered by its peers an important and reliable EOI partner. For further information on the exchange of information practice of Bulgaria and to read the full report, click here.

SUPPLEMENTARY PHASE 1 REPORTS

Lebanon: The Supplementary Phase 1 review of Lebanon finds that the progress made by Lebanon in addressing the gaps identified in its 2012 Report in respect to its legal and regulatory framework is promising, particularly in light of the challenges that Lebanon is facing regarding the current political situation. Considering the actions undertaken to address the recommendations made in the 2012 Report, Lebanon is in a position to move to the next round of peer review, which is scheduled to commence in the second half of 2018, in accordance with the schedule of reviews for the next round. However, it is recommended that Lebanon quickly amend its legislation on access to information, to remove any uncertainty and restrictive conditions, so that (i) it is ensured the authorities have the power to obtain and provide information, including banking information that is the subject of a request under an EOI agreement in accordance with the international standard and (ii) Lebanon is then able to fully comply with and give effect to its EOI agreements. In addition, other recommendations were made in respect of bearer shares, attorney-client privilege and availability of accounting information for foreign trusts. A follow-up report on the measures taken by Lebanon to respond to the recommendations made in the present report will be provided to the Peer Review Group in June 2017. For further information on the exchange of information practice of Lebanon and to read the full report, click here.

Nauru: Nauru’s legal and regulatory framework requires availability, access and exchange of all tax relevant information in accordance with the international standard. Nevertheless, room for improvement was identified in areas concerning availability of information on foreign trusts administered in Nauru and the availability of accounting records and underlying documentation of certain entities. The report notes that Nauru joined the multilateral Convention on mutual Administrative Assistance in Tax Matters in June 2016, expanding its treaty network to over 100 treaty partners. Nauru’s response to the recommendations, as well as the application of its legal framework and exchange of information practice will be considered in the next round of peer review of Nauru, which is scheduled to commence in the second half of 2018. For further information on the exchange of information practice of Nauru and to read the full report, click here.

Vanuatu: Vanuatu’s Supplementary Report assessed improvements made to the legal framework and exchange of tax information mechanisms since the adoption of a Phase 1 Report in 2011. In light of actions undertaken to address the recommendations made in 2011, Vanuatu is in a position to move to the next round of peer reviews, which is scheduled to commence in the second half of 2018. For further information on the exchange of information practice of Vanuatu and to read the full report, click here.

SUPPLEMENTARY PHASE 2 REPORTS

Barbados: The Phase 2 supplementary review of Barbados resulted in a rating of Largely Compliant with the international standard. Barbados’ legal framework ensures the availability of ownership and identity information with respect to all relevant entities. However, the report found a need for improvement in the supervision and enforcement of such obligations. The report also identified a gap in the availability of accounting information with respect to non-taxable trusts. Further, Barbados is recommended to ensure adequate oversight of filing obligations of international business companies. The report noted steps taken by Barbados to improve its EOI practice, although additional work remains to be done. For further information on Barbados’ legal and regulatory framework in the field of transparency and exchange of information and its implementation in practice, access the full report here.

Israel: Israel’s regulatory framework and its implementation in practice are now rated Largely Compliant with the international standard for transparency and exchange of information for tax purposes. Since the Phase 2 review, Israel has implemented several legal as well as practical measures to improve transparency and access to the relevant information. These measures include abolition of bearer shares, amendment of the tax authority’s access powers, so that information, including banking information, can be obtained regardless of domestic tax interest, and becoming a signatory of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. As these changes were introduced only recently, Israel is recommended to monitor their practical implementation. There are a few areas where improvement remains to be done. These are mainly related to availability and access to certain information concerning new immigrants and veteran returning residents, and to exchange of information processes and resources to ensure that relevant information can be provided in time and in the requested quality in all cases. For further information on Israel’s’ legal and regulatory framework in the field of transparency and exchange of information and its implementation in practice, access the full report here.